Boerkoel v. Hayes Mfg. Corporation, Civil Action No. 963.

• Decision Date: 26 March 1948
• Docket Number: Civil Action No. 963.
• Citation: 76 F. Supp. 771
• Parties: BOERKOEL v. HAYES MFG. CORPORATION.
• Court: U.S. District Court — Western District of Michigan

76 F. Supp. 771

BOERKOEL v. HAYES MFG. CORPORATION.

Civil Action No. 963.

District Court, W. D. Michigan, S. D.

March 26, 1948.

Harrington, Waer & Cary and Leon W. Harrington, all of Grand Rapids, Mich., for plaintiff.

McKee Robison, of Detroit, Mich., and Alexander, Cholette, Buchanan, Perkins & Conklin and Paul E. Cholette, all of Grand Rapids, Mich., for defendant.

STARR, District Judge.

On December 31, 1946, plaintiff filed complaint under section 16(b) of the Fair Labor Standards Act of 1938, as amended, 29 U.S.C.A. § 216(b), to recover alleged unpaid overtime compensation and also liquidated damages, court costs, and attorney's fee. He alleged in substance that while employed by defendant in its plant at Grand Rapids, Michigan, during the period from September, 1941, to December, 1944, he was engaged in the production of goods for commerce and that during this period he was employed more than 40 hours a week but received compensation for only 40 hours. He further alleged that he was entitled to overtime compensation under section 7 of the Fair Labor Standards Act, as amended, 29 U.S.C.A. § 207, which provides in part:

"(a) No employer shall, except as otherwise provided in this section, employ any of his employees who is engaged in commerce or in the production of goods for commerce— * * *

"(3) for a workweek longer than forty hours after (October 24, 1940) the expiration of the second year from such date, unless such employee receives compensation for his employment in excess of the hours above specified at a rate not less than one and one-half times the regular rate at which he is employed."

Defendant filed answer admitting that plaintiff was engaged in the production of goods for commerce, but denying liability on the ground, among others, that plaintiff was "employed in a bona fide executive and administrative * * * capacity" as provided in section 13(a) of said Act, 29 U.S.C.A. § 213(a). On May 14, 1947, subsequent to the beginning of the present suit, Congress amended the Fair Labor Standards Act by passing the so-called Portal-to-Portal Act, 29 U.S.C.A. § 251 et seq. Section 2 of this act, 29 U.S.C.A. § 252, which gives "relief from certain existing claims under the Fair Labor Standards Act of 1938, as amended," provides in part:

"(a) No employer shall be subject to any liability or punishment under the Fair Labor Standards Act of 1938, as amended * * * (in any action or proceeding commenced prior to or on or after the date of the enactment of this Act), on account of the failure of such employer to pay an employee minimum wages, or to pay an employee overtime compensation, for or on account of any activity of an employee engaged in prior to the date of the enactment of this Act, except an activity which was compensable by either —

"(1) an express provision of a written or nonwritten contract in effect, at the time of such activity, between such employee, his agent, or collective-bargaining representative and his employer; or

"(2) a custom or practice in effect, at the time of such activity, at the establishment or other place where such employee was employed, covering such activity, not inconsistent with a written or nonwritten contract, in effect at the time of such activity, between such employee, his agent, or collective-bargaining representative and his employer.

"(b) For the purposes of subsection (a) of this section, an activity shall be considered as compensable under such contract provision or such custom or practice only when it was engaged in during the portion of the day with respect to which it was so made compensable.

"(c) In the application of the minimum wage and overtime compensation provisions of the Fair Labor Standards Act of 1938, as amended, * * * in determining the time for which an employer employed an employee there shall be counted all that time, but only that time, during which the employee engaged in activities which were compensable within the meaning of subsections (a) and (b) of this section.

"(d) No court of the United States, of any State, Territory, or possession of the United States, or of the District of Columbia, shall have jurisdiction of any action or proceeding, whether instituted prior to or on or after the date of the enactment of this Act, to enforce liability or impose punishment for or on account of the failure of the employer to pay minimum wages or overtime compensation under the Fair Labor Standards Act of 1938, as amended, * * * to the extent that such action or proceeding seeks to enforce any liability or impose any punishment with respect to an activity which was not compensable under subsections (a) and (b) of this section."

Subsequent to the passage of the Portal-to-Portal Act defendant amended its answer by alleging as a special defense that because plaintiff was claiming overtime compensation for activities which were not made compensable by either contract, custom or practice, his action was barred and the court deprived of jurisdiction by section 2(d) of the Portal-to-Portal Act above quoted. Defendant also filed motion to dismiss the complaint on the following grounds:

(1) Because it failed to state a claim against defendant upon which relief could be granted;

(2) Because the court was without jurisdiction of the subject matter, as jurisdiction had been withdrawn by section 2(d) of the Portal-to-Portal Act;

(3) Because plaintiff's alleged claim was barred by section 2(d) of the Portal-to-Portal Act.

Federal courts are courts of limited jurisdiction, and it has long been established that a complaint must allege facts which affirmatively show jurisdiction. Gully v. First National Bank, 299 U.S. 109, 57 S.Ct. 96, 81 L.Ed. 70; Holland v. General Motors Corporation, D. C., 75 F.Supp. 274; Seese v. Bethlehem Steel Co., D. C., 74 F.Supp. 412. Therefore, the first question in the present case is whether or not, under the Fair Labor Standards Act as amended by the Portal-to-Portal Act, plaintiff's complaint alleges facts establishing the jurisdiction of this court. In considering this question the court has had the benefit of comprehensive and able briefs submitted by counsel for the respective parties.

The constitutionality of the Portal-to-Portal Act, particularly section 2 thereof, has been upheld by many decisions, including the following: Cochran v. St. Paul & Tacoma Lumber Co., D. C., 73 F.Supp. 288; Burfeind v. Eagle-Picher Co., D. C., 71 F.Supp. 929; Holland v. General Motors Corporation, supra; Bumpus v. Remington Arms Co., D. C., 74 F.Supp. 788; Seese v. Bethlehem Steel Co., supra; Bateman v. Ford Motor Company, D. C. E. D. Mich., 76 F.Supp. 178 (decided February 27, 1948).

The present case was begun, and involves activities performed, prior to the passage of the Portal-to-Portal Act. However, it should be noted that the above-quoted provisions of that Act apply to any action or proceeding, whether instituted prior to or after the date of its enactment. It seems clear that under section 2(d), the court does not have jurisdiction unless the complaint alleges facts affirmatively showing that plaintiff's overtime activities were compensable under some contract provision or under a custom or practice as provided by section 2(a) and (b). In Sadler v. W. S. Dickey Clay Mfg. Co., D.C., 73 F.Supp. 690, 691, the court said:

"The complaint in this so-called `Portal-to-Portal' action does not allege that the liability claimed of defendant for failure to pay overtime compensation was the result of the breach of `an express provision of a written or nonwritten contract in effect, at the time' of the events set forth in the complaint; or the deviation from `a custom or practice in effect, at the time of such activity, at the establishment or other place where' the employees here involved were employed by defendant. Because of such deficiency, defendant has moved to dismiss this action for want of jurisdiction in the Court to proceed with the further prosecution hereof, in light of the provision of Section 2(a) (b) (c) (d) of the `Portal-to-Portal Act of 1947' 29 U.S.C.A. § 251, etc. * * *

"Since enactment of Section 2 of the `Portal-to-Portal Act of 1947,' employees prosecuting actions, seeking to recover minimum wages or overtime compensation under Sections 6, and 7 of the Fair Labor Standards Act of 1938, as amended, 29 U.S.C.A. §§ 206, 207, must submit proof that they are entitled to such compensation, by reason of either:

"`(1) an express provision of a written or nonwritten contract in effect, at the time of such activity, between such employee, his agent, or collective-bargaining representative and his employer; or

"`(2) a custom or practice in effect, at the time of such activity, at the establishment or other place where such employee was employed, covering such activity, not inconsistent with a written or nonwritten contract, in effect at the time of such activity, between such employee, his agent, or collective-bargaining representative and his employer.'

"Congress, in Section 2(d) of the `Portal-to-Portal Act of 1947,' has delimited the jurisdiction of all courts to enforce liabilities accruing under the Fair Labor Standards Act of 1938, to the extent, that in such actions a recovery may (now) be had only for activities that are referable to the contingent situations stated in subsections (a) and (b) of Section 2 thereof. So limiting the jurisdiction of the United States District Courts, the axiom, that whatever is essential to establish Federal jurisdiction to determine a cause must be shown to exist by allegations contained in the complaint, comes into operation. If a complaint prosecuted in the Federal Courts does not establish jurisdiction in the Court to adjudicate the cause there asserted, the suit must be dismissed unless the defect in the complaint can be cured by amendment. Smith v. McCullough, 270 U.S. 456, 46 S.Ct. 338, 70 L.Ed. 682; McNutt v. General Motors, 298 U.S. 178, 189, 56 S.Ct. 780, 80 L.Ed....